Taxes and client payout

[Jeffrey211]

Does anyone else feel like IRS is getting paid twice.  If a client pays taxes for the services and their payout is different than the payout a host gets, then a host pays taxes on their income for the same transactions than the IRS is getting taxes twice.  How do we, host, see the client total cost breakdown?  This used to be an option but I do not see it anymore.

[Linda108]

Perhaps I am not understanding your point.  Who is the client?  Do you mean a guest?  If so, you pay income tax and the guest pays occupancy tax.  Am I totally off base?

[Lisa723]

@Jeffrey211 as @Linda108 points out the IRS is not getting anything from guest payments. Lodging tax is a local tax, which is a deductible business expense from an income tax standpoint.

Unfortunately Airbnb makes it hard for hosts to see guests' total payments, and vice versa. But in your earnings summary you can see all of your taxable income and deductions.

[Susan151]

@Jeffrey211  You are clearly confused about how taxes work.

The guest pays a lodging/hotel/occupancy tax. This is a percentage of the gross rental rate that the guest will be paying. The occupancy taxes are paid to a combination [depending on your local laws] of the state, town, city, and/or county.

Then there is your income which is reported on your Income taxes. You pay a percentage of your income to the Federal, State and Local governments [depending on your local laws] based on your tax rate.

These two taxes are totally unrelated.

BTW, the guest's tax is NOT deductible on your taxes unless you pay for it out of your own pocket; not the guest.

[Lisa723]

@Susan151 ...

Guests don't pay lodging taxes directly. They are collected from the guest and remitted to the locality by the booking platform and/or the host.

Airbnb and other platforms include taxes that hosts collect from guests (and remit to their localities) in reported gross earnings attributed to the host. So, the tax that I collect and remit is included as business income and a corresponding business expense.

If AIrbnb or another platform collects and remits a tax on my behalf, then it is not included in either my income or expenses.

[Jeffrey211]

Thank you.  It sounds like all the guest fees, which I cant see, are reasonable and taxes on each transaction are not being taxed twice.  Thank you.  I thought because Airbnb is a middle man between the guest and the host, that they were taxing on the transaction that we are completing for our income.